Healthcare price transparency is high stakes for both patients and providers. With the average cost of a hospital stay for patients in the United States amounting to $2,883 a day, a patient’s bill can quickly add up. Patients need reliable information about the cost of services as early as possible so they can plan accordingly. For providers, transparent pricing helps deliver a more compassionate patient financial experience and reduces the risk of missed revenue opportunities. However, it’s also a compliance issue, especially with the introduction of the Hospital Price Transparency Rule. While the Centers for Medicare & Medicaid Services (CMS) found that 70% of hospitals are in compliance as of February 2023, the goal is to reach 100% compliance. Experian Health and Cleverley + Associates have joined forces to address the challenges providers may be facing.
Riley Matthews, Lead Product Manager at Experian Health, and Jamie Cleverley, President of Cleverley + Associates, discuss what hospitals need to do to comply with the Hospital Price Transparency Rule.
What is hospital price transparency and what is the Hospital Price Transparency Rule?
The introduction of CMS price transparency requirements has brought about substantial shifts in the landscape of price disclosure for hospitals across the United States. Enacted as part of the FY19 IPPS Final Rule, these requirements were established in alignment with provisions outlined in the Affordable Care Act. Hospitals are now mandated to provide a comprehensive list of their current standard charges via the Internet in a machine-readable format, with updates required at least annually or more frequently as deemed necessary. This information can be presented in the form of a chargemaster or any other format chosen by the hospital, as long as it meets the criteria of being machine-readable.
What are the new price transparency updates coming on July 1, 2024?
As of July 1, 2024, CMS mandates that hospitals affirm the completeness and accuracy of their machine-readable file (MRF). This affirmation includes confirming that all applicable standard charge information, as required by § 180.50, has been included in the MRF. Furthermore, hospitals must assert that the encoded information is true, accurate, and up-to-date as of the specified date indicated in the MRF.
Also starting on July 1, 2024, CMS will require hospitals to convert the contents of the MRF into a predefined template. This template is available in either .JSON or .CSV format. Additionally, there are new mandatory data elements, supplementing the previously specified ones (e.g., the five types of standard charges). Some of these new data elements have a delayed implementation date of January 1, 2025.
What’s the difference between the Hospital Price Transparency Rule and the No Surprises Act?
- The Hospital Price Transparency Rule aims to give patients clear, upfront information about hospital pricing, so they are empowered to make informed choices about their care.
- The No Surprises Act offers patients protection from surprise billing when they receive certain emergency and non-emergency services from out-of-network providers at in-network facilities.
- The two sister mandates work together to improve the patient financial experience and help patients navigate their financial obligations.
What are the most common price transparency compliance challenges?
Cleverley says there are two main reasons why hospitals may be struggling to comply. First, there is some confusion about what is required to be disclosed (and how). To bridge this gap, Experian Health and Cleverley + Associates have created a standard methodology that satisfies the rule requirements.
Second, some providers are hesitant to disclose pay rates amid concerns over financial viability and potential pressure to lower charges. However, the price transparency rule aims to enable market competitiveness and empower patients.
Furthermore, making cost estimates freely available improves patient satisfaction by 88%, according to data from PYMNTS and Experian Health. A patient-centered approach to billing and payments not only supports compliance with price transparency regulations, but leads to faster payments and consumer satisfaction. In addition to Patient Estimates and Patient Financial Advisor, which offer patients accurate, pre-service cost estimates, there are a host of other Patient Payment Solutions that allow patients to choose payment plans, manage bills and make payments.
How are Experian Health and Cleverley + Associates helping providers comply with the Hospital Price Transparency Rule?
The Hospital Price Transparency Final Rule requires hospitals to display payer-specific rates as a consumer-friendly list of 300 shoppable service items. Experian Health’s Self-Service Patient Estimates solution helps providers compile these lists and deliver accurate estimates to patients in a clear and comprehensive way. This puts consumers in the driving seat when it comes to making informed healthcare choices and supports hospitals in providing clear, accurate and legally compliant pricing information.
Providers must also make certain pricing information for items and services available as a machine-readable file displayed on their website. Cleverley + Associates has the necessary capabilities to deliver the machine-readable files quickly and at scale. By working together, both organizations deliver a holistic solution to meet price transparency mandates.
Jamie Cleverley says this helps hospitals prepare for the changing environment: “It’s more than compliance. It’s having trusted partners that are talking through and consulting with hundreds of hospitals across the country.”
What is the best approach for providers to ensure price transparency compliance?
Riley Matthews says that the first step for providers is to define a strategy that best fits their individual organization. They should identify best practice workflows based on their existing resources and intellectual property and partner with an organization that can bring solutions to areas where the system is lacking.
The key is to execute the business strategy while prioritizing the patient experience. Experian Health and Cleverley + Associates can support hospitals in providing an efficient, consumer-friendly workflow, as well as the more robust backend concepts of the machine-readable file.
Cleverley says, “We’ve created a methodology to display aggregated claim payment levels, simplifying the display of information for both hospitals and patients. Many solutions attempt to display just a list of payment rates, but the combination of those lines is really what’s most relevant to patients.”
For example, a patient coming in for an outpatient surgery has no idea what additional services, drugs and tests they may need. This solution looks at the statistical utilization of services to calculate the charges for that procedure, and then displays that value. This holistic approach meets “not only the letter of the law, but also the spirit of it.”
What’s next for price transparency?
There has been a significant challenge around non-uniformity of data. Hospitals have been using different structures and file formats for displaying required information, but CMS has implemented a standardized file schema for use beginning July 1, 2024. Cleverley + Associates has a file structure that conforms to the Medicare standard schema and is available to help hospitals understand the new requirements.
As the penalties for non-compliance increase, providers need to be proactive in reducing the financial risks associated with price transparency non-compliance. Riley Matthews says that innovation and partnership helps providers get ahead of compliance rules and allows hospitals to focus on patient care.
Find out more about how Experian Health and Cleverley + Associates are supporting healthcare organizations comply with the Hospital Price Transparency Rule and improve the patient financial experience.
